Organizing your financial information will bring peace of mind to you today and relieve your loved ones’ burden in the future. The goal is to make and maintain an accurate list of accounts and passwords and relevant contact names at financial institutions. Planners and books (“My Life Directory,” “I’m Dead. Now What?”) are available to help you understand the scope of the project and start the process of organizing all records and personal information.
The assumption behind this column is that you already have an estate plan with necessary documents such as a will, healthcare directive, and durable power of attorney. If this is not the case, you should retain an attorney to create these basic and most important legal documents. You can then focus your attention on the written steps your family should take if something happens to you. These steps should include a list of all comprehensive list of contacts (family, lawyers, advisors), digital and hard assets, accounts, bills, debts, credit cards, insurance policies, annuities, pensions, and passwords. Include a list of all charges (monthly, quarterly, annually) that automatically debit money from your checking account.
Caution should be taken when considering online websites or apps that store your data and instructions for a one time or recurring fee. Turning over consolidated personal financial data opens you to the possibility of identity theft, hacking, misuse of your records, erasure, and loss using these services. Many elect to digitize information in a word file or spreadsheet and store it on a flash drive. Others create summaries and store hard copies with other important documents like your will or the deed to your home.
Keep these records accurate with annual updates or any fundamental shift in how your finances are managed and by whom. Be sure your executor and other relevant family members know the location of this information. Preparing your financial records for your family can be time-consuming, but it is not complicated. The true goal of this task is organization and consolidation. In my opinion, it is one of the most important financial tasks you will undertake during your life.
When your project is near completion (other than annual updates), ensure nothing is being overlooked by consulting an estate planning attorney, who will make sure you have all of the necessary legal documents in place. We provide these services and would be happy to talk with you about your planning needs. Call (570) 784-4654 to schedule an appointment.